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Illustration: Lazaro Gamio/Axios

Comcast and Disney are about to engage in a bidding war for the entertainment assets of 21st Century Fox, and analysts tell Axios that Comcast is likely to win because it's more desperate for what Fox is trying to offload.

Why it matters: There is huge pressure on media and telecom companies to compete with new rivals like Amazon and Netflix, so the loser will be forced to buy something else.

  • Background: Disney originally agreed to buy Fox's entertainment assets for around $52.4 billion, but was then topped by Comcast's $65 billion, all-cash offer. Disney is expected to come back over the top this week, and Comcast has given no indication that $65 billion was its best and final offer.

For Comcast, this is all about large-scale international diversification, which relatively difficult to find elsewhere. Rich Greenfield, a managing director and media analyst at BTIG, explains:

"They've done well being vertically integrated in the U.S. but they realize that business is slowing. You want to add a little to your business in the U.S. but what you really want is to replicate that success globally. No other assets let you go global like Fox's stake in Sky Broadcasting, Star in India and Fox's Latin America assets. It's very hard to see another obvious fallback plan if you're Comcast.... you can see why [it] feels it must ultimately win."

Disney, on the other hand, views Fox's Sky, Star and Hulu assets as critical to its direct-to-consumer subscription video ambitions as it attempts to catch Netflix. However, it may have other less costly options like Spotify and/or Twitter (whose current combined market cap is almost exactly what Comcast is offering for Fox). Per Greenfield:

  • Spotify has globally scaled its direct-to-consumer subscription business.
  • Twitter has a global, mobile-first audience that's been investing in video technology and content rights for the past two years.

Other Disney backup plans could include Pandora or Snapchat, even though Pandora doesn't have an international business and Snapchat doesn't have a paid subscription business.

Disney also is already facing some analyst opposition to prevailing in a bidding war with Comcast, with ad and media research firm Pivotal downgrading its stock on Monday from "hold" to "sell." Pivotal also worried about what happens to Disney without the Fox assets but, again, it has other ways to at least partially meet its needs.

Be smart: With the biggest regulatory hurdles cleared due to a successful AT&T takeover of Time Warner last week, the winner will probably come down to business decisions, not likelihood of approval.

Bottom line: Bet on the more desperate buyer.

Go deeper

“You blew it”: GOP activist turns on corporations over vaccine mandates

The chairman of the American Conservative Union said on "Axios on HBO" he accepts "Joe Biden is my president, and I want him to succeed," but predicted Republicans retake the House and Senate in 2022 — with greater than 50% odds Donald Trump runs in 2024.

The big picture: In a joint interview with his wife, Mercedes, Matt Schlapp also refused to share their vaccination status. And he told corporate America "you blew it" by embracing vaccine mandates and liberal social stances that have alienated GOP voters and politicians.

54 mins ago - Politics & Policy

Pelosi expects “billionaire’s tax” to pay for Biden social spending

Photo: Yasin Ozturk/Anadolu Agency via Getty Images

House Speaker Nancy Pelosi (D-Calif.) said Sunday she expects the chamber to pass the bipartisan infrastructure plan by week’s end, and alternatives to corporate tax hikes and a “billionaires tax” will be used to finance President Biden’s promised expansion to the social safety net.

Why it matters: Pelosi’s comments come as House and Senate leaders try to wrap up a deal. What will get cut — and how the remainder will be paid — are linchpins to a final agreement.

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FTX CEO Sam Bankman-Fried mystified by value of NFTs

Crypto exchange FTX, valued last week at $25 billion, recently launched an NFT marketplace by selling an image of the word "Test" for $270,000.

  • FTX founder and CEO Sam Bankman-Fried tells "Axios on HBO" that he doesn't quite understand the appeal, but adds that he doesn't personally appreciate many visual arts.